Real estate expert says mayor’s plan has some potential drawbacks

An economist with the BC Real Estate Association says an idea from Vancouver’s mayor to slow foreign real estate sales has some potential drawbacks.

Cameron Muir says the first concern would be how much property tax is being talked about here.

“The concern I guess would be the concentration of foreign investors in the tonier pockets of Vancouver you know how much of a tax or a disincentive would you have to put in there in order to dissuade wealthy foreigners from buying in those markets.”

Muir says people selling their Vancouver home could also be impacted.

“The other is that there is both buyers and sellers to a transaction. If you are a home owner looking to sell your property in Vancouver and you have buyers both domestically and foreign who are bidding on that property you are likely to be happy that you have that extra competition in order to garner a better price for your home.”

Muir says the data shows there are also simply not enough foreign buyers to actually drive the market.

“The data does suggest that offshore buyers or lets say investors in residential real estate from all sources are relatively small proportion of the market. So in Vancouver one to four-percent any given month of home sales are from foreign investors. Certainly enough to potentially drive up prices if they are focused in a certain neighbourhood.”

Muir says affordability is a relative term as many first time home buyers are having few problems getting into condos at a reasonable price.

Although he admits there is a significant premium when it comes to single detached homes.

Mayor Gregor Robertson is floating the idea of a special property tax possibly targeted at offshore investors to try and slow down rising housing prices.

It’s not discriminating against Albertans or any particular “foreigner”.There may be a few taxes and fees that people outside of BC pay that residents of BC do not.
However,the lower mainland is to expensive for BC residents that try to move there from rural BC too.You cannot sell a home in rural BC and use that money to buy a home in Vancouver,or even in the suburbs of Vancouver.The same home that you sold in rural BC will cost at LEAST twice as much in Vancouver.
It’s a problem for us too Chris.

I think the off shore property tax in long over due. I floated this idea as a way of funding public transportation. Tax them as if they lived here and were spending their money into our economy. Forget the cop-out-referendum. That will get voted down regardless what the question is.

I read that 40% of buyers in the Vancouver market are from offshore or out-of-country. Perhaps that is inaccurate???

Regardless, it is a revenue stream that should not be ignored and would ease the pressure from the over taxation to BC citizens. Tax them, they can afford it!

I think Mayor Moonbeam is opening up a can of worms that can easily lead us down an extremely slippery slope,and has negative consequences as well as the positives that he hopes would materialize.Be honest people.Everyone likes taxes on OTHER people that they don’t have to pay themselves.
But,for example,if you are a homeowner who wants to sell,Mayor Moonbeam is essentially stepping in to minimize the price that you can receive for your own private property.Long term,I don’t see that helping many people.
Secondly,an I await responses from people with more expertise in real estate and taxes than I have.But I thought that investment properties were already taxed.It used to be that only your personal residence was exempt from a capital gains tax.Or has that policy been changed? Americans still pay capital gains taxes on the sale of their primary residence.I do not believe that is true in Canada.
Frankly,I do not see this as an idea that will help very much.Perhaps we should get more in the way of details,and present them all to accountants,economists,and people with more knowledge than you every day politician.
But as of now,this sounds like just another cash grab from a big tax and spend mayor.

This just in, residents in Shanghai cannot see across the street. Chinese residents want clean air. What’s their alternative? Vancouver! The prices will rise…again, and thanks to the Chinese. Michael Levy says it’s not where in the world will China be in 25 years, it’s where in China will the world be in 25 years.